Government will act on Nuttall’s employee ownership suggestions

In a speech to the Institute of Chartered Accountants, Clegg said that the economy 'desperately needs an injection of responsibility' and is now encouraging more of what he calls stakeovers, namely staff buy-outs to save 'great British firms'.

Citing evidence from Co-operative that shows, during 2011, employee-owned firms grew 50 per cent fast than the economy at large, Clegg said that the Treasury is now conducting an internal review looking at the role of employee ownership in supporting growth.

The review will be completed in advance of chancellor George Osborne's Autumn Statement, with three particular recommendations from the report driving the move.

The government welcomes Nuttall's call for a sector-led institute, aimed at providing information and advice to managers and employees. The institute is set to bring together the Employee Ownership Association, Baxi Partnerships, Prospects and Co-operatives UK.

Nuttall's second suggestion, which Clegg says the government will be acting on, is to encourage employees and bosses to consider the employee ownership model, especially when a business is being sold.

Thirdly, Nuttall puts forward the notion of off-the-shelf toolkits for the employee ownership business model. It is a proposal which the coalition 'will be taking forward'.

In conclusion, Clegg added, 'Drawing on the outline provided by Graeme [Nuttall] in his report, the government will produce a DIY kit for employee owned firms by the end of September - draft articles that will be freely available to all.'

Jo Causon, chief executive of the Institute of Customer Service, says that while there is an increased perception that employee-ownership is the answer to staff engagement, it shouldn't be assumed that it is the only reason for the success of examples such as John Lewis.

She adds, 'The critical issue here is the importance of employee engagement. There are multiple ways a firm can demonstrate a tangible investment in its employees and incentivise commitment, and they are not always financial.

'What creates engagement and success is not necessarily a business' ownership model but that it has developed a clear vision of the customer experience. John Lewis has instilled this customer service "ethic" in its employees and has built it into its staff training, business strategy and operational processes.'